LEO #1609 CONFLICT OF INTEREST; CONFIDENCES; SIMULTANEOUS
          REPRESENTATION OF CLIENT/PROPERTY OWNER AND
          CLIENT/POTENTIAL PURCHASER/CREDITOR OF THIRD PARTY

You have presented a hypothetical situation in which a law firm is
defending client B in pending litigation, attempting to prevent
Plaintiff in the proceeding from imposing a lien on property (the
"Property") in which B has an interest. You indicate that the
Property is for sale, has been for some time and Client B desires
the Property be sold.  If a sale occurs, there will be funds to pay
Plaintiff, as well as a significant benefit to client B.

You advise that the law firm received from counsel representing a
co-defendant in the litigation a proposed letter of intent to enter
into a contract for the purchase of the Property, submitted by Mr.
X.

Finally, you indicate that Mr. X is a judgment debtor of A who is
a client of the law firm.  In fact, the law firm represented client
A in obtaining judgments against Mr. X, which judgments are
substantial and remain outstanding.  Within the preceding three
months, the law firm has undertaken activities toward collecting
the judgment against Mr. X.  

You have asked the committee to opine, under the facts of the
inquiry, as to several issues related to the representations of
clients B and A.     

The appropriate and controlling Disciplinary Rules related to your
inquiry are DR 4-101(B) which provides for the preservation of
client confidences and secrets; DR 4-101(C)(4) which states that a
lawyer may reveal confidences or secrets necessary to establish the
reasonableness of his fee or to defend himself or his employees or
associates against an accusation of wrongful conduct; and DR 5-
105(B) which states that a lawyer shall not continue multiple
employment if the exercise of his independent professional judgment
will be or is likely to be adversely affected by his representation
of another client, except to the extent permitted under DR 5-
105(C).
  
1.   As to whether the law firm must withdraw from representing
     both clients, assuming that X will be applying assets to the
     purchase of the property which assets could be used to satisfy
     the claim of B, the committee is of the opinion that client A
     and client B have conflicting interests which can neither be
     reconciled nor cured by consent.  Thus, the committee opines
     that the firm may not continue to represent B in the pending
     litigation and A as to collection of the judgment against X,
     potential buyer of the property involved in B's litigation. 
     Since the conflict has matured, the committee is of the view
     that the law firm must withdraw from both representations. 
     See LEO #1457.

2.   As to whether the law firm is prohibited from telling client
     B about client A's judgments against Mr. X, the committee
     opines that the law firm may not disclose to client B any
     information regarding client A's judgments against Mr. X. 
     Under DR 4-l0l(B), information regarding the judgments, even
     though available in the public record, is a secret, learned
     within the attorney-client relationship, and the disclosure of
     such information would likely be detrimental to client A. 
     Thus, the information must be protected by the law firm.

3.   As to whether the law firm is prohibited from telling client
     A about the proposal submitted by Mr. X for the purchase of
     the Property, the committee opines that the law firm may not
     disclose to client A any information regarding the proposal
     submitted by Mr. X for the property. As above, information
     regarding the proposal related to B's litigation is
     confidential, learned within the attorney-client relationship,
     and the disclosure of such information would be detrimental to
     client B.  Thus, the information must similarly be protected
     by the law firm.

4.   As to whether the law firm is prohibited from revealing to
     either client any specifics with regard to the conflict, the
     committee opines that the law firm may not reveal specifics to
     either client with regard to the nature of the conflict. The
     disclosure of such specific information would be a breach of
     client confidentiality and violative of DR 4-101(B).  Thus,
     the law firm may only tell each client that there is an
     irreconcilable conflict which will not permit the law firm to
     continue either representation.

5.   As to whether the law firm may reveal the basis of the
     conflict as part of its defense if client B files a claim
     against the law firm, the committee believes that such
     disclosure would be permissible as part of its defense under
     the precepts of DR 4-101(C)(4), the firm may reveal
     confidences or secrets necessary to defend itself against an
     accusation of wrongful conduct.  The committee cautions,
     however, that disclosure should be made only to the extent
     necessary to rebut any accusation by client B of the firm's
     wrongful conduct.  See LEO #1433.

[DRs 4-101(B) and (C)(4), 5-105(B) and (C); LEOs #1433, 1457]

Committee Opinion 
September 14, 1995